As the primary driving forces of gastrulation, convergence and extension (C&E) movements lead to a medio-lateral narrowing and an anterior-posterior elongation of the embryonic body axis. Histone methylation as a post-translational modification plays a critical role in early embryonic development, but its functions in C&E movements remain largely unknown. Here, we show that the setdb2-dvr1 transcriptional cascade plays a critical role in C&E movements during zebrafish gastrulation. Knockdown of Setdb2, a SET domain-containing protein possessing a potential histone H3K9 methyltransferase activity, induced abnormal C&E movements, resulting in anterior-posterior shortening and medio-lateral expansion of the embryonic axis, as well as abnormal notochord cell polarity. Furthermore, we found that Setdb2 functions through fine-tuning the expression of dvr1, a ligand of the TGF-β superfamily, to an appropriate level to ensure proper C&E movements in a non-cell-autonomous manner. In addition, both overexpression and knockdown of Dvr1 at the one-cell stage resulted in defects at epiboly and C&E. These data demonstrate that Setdb2 is a novel regulator for C&E movements and acts by modulating the expression level of dvr1, suggesting that Dvr1 acts as a direct and essential mediator for C&E cell movements.